Devesh Rasgotra: India-China competition in the Indian Ocean

With around 50% of the world’s container traffic and 70% of its petroleum products travelling across its waters, the Indian Ocean is a vital area for Asian countries. This has not gone unnoticed by China, who is competing for influence in the region.

Naturally, India has vital interests in the Indian Ocean. At the IISS Shangri-La Dialogue in 2009, US defence secretary Robert Gates stated that the US looked to India to be a net security provider in the Indian Ocean. This was reinforced by Indian Defence Minister A.K. Antony in 2011. The proximity of major shipping lanes means that it is in India’s interest to be a net security provider to island states. But China has also thrown its hat into the ring. Spurred on by energy and economic security concerns, China has proposed a ‘maritime silk road’ connecting the Pacific and Indian oceans, and has stepped up its interaction with Indian Ocean states.

India’s geographical position enables it to be a stabilising force in the Indian Ocean, and as a net security providerit can also be responsible for maintaining cohesion. Security arrangements with states in the Indian Ocean and increased investment in infrastructural projects in those states increase India’s influence, which in turn guarantees its defence and economic security. India has conducted multilateral naval exercises (MILAN) with Indian Ocean states such as the Seychelles, Mauritius and the Maldives. It has also conducted bilateral naval exercises with Myanmar and Sri Lanka. India has invested some US$5 million for defence-related projects in the Seychelles, and has installed radar surveillance in the atolls of the Maldives. But while India has sought to expand its influence in the Indian Ocean, China has employed a strategy of investment in infrastructure in ASEAN countries, as well as further west, while increasing its security and defence cooperation with countries in the Indian Ocean region.

Historically, the Silk Road reflected China’s connection to the world and its superior role in world trade. Today, Beijing is aware that its links with the Indian Ocean region can safeguard its economic development and security. Like India, China has employed both hard and soft power tactics to increase its influence. The Chinese navy conducted exercises in the East Indian Ocean earlier this year. Chinese naval outposts and China-friendly ports have been established in Hambantota in Sri Lanka, Chittagong in Myanmar, Gwadar in Pakistan and in the Seychelles. Chinese investment in Sri Lankan infrastructure last year rose to US$2.2 billion, with investment in Mauritius at US$1bn. Chinese tourists now make up 30% of visitors to the Maldives; more than double the number from any other country.

China has extended an invitation to India to join the maritime silk road. There has been no official reaction from New Delhi, but privately the attitude is negative. The Indian strategic establishment has long been wary of the Chinese navy’s rising profile in the Indian Ocean. The construction of port infrastructure in Pakistan (Gwadar) and Sri Lanka (Hambantota) has fuelled suspicions of China's intentions in the region. India fears that China will constrain its influence in its own backyard.

But although India and China vie for influence in the Indian Ocean, their strategies and objectives are similar. The Indian Ocean is a lifeline to both countries. For India’s imported oil dependency, currently at 75%, the Indian Ocean is the key area for trade with the Gulf states. For China, 80% of its petroleum imports pass through the Indian Ocean and then through the Malacca Strait.

With both countries so heavily dependent on trade through the Indian Ocean, any strategy of protecting trading lanes would be beneficial to both states. China and India’s Indian Ocean strategies have shared objectives, and these should underpin greater cooperation, rather than competition.